Changes in People Management at Financial Services - Case Study Example

Contents: Page number. 1. Introduction: 3 2. Analysis: 4-9 3. Conclusions: 10 4. References: 11. DATE: 09-12-06 Case study analysis of YBS: Introduction: YBS is a society founded in 1880 having approximately 10,000 employees and 400 branches in U.K. Due to globalization and competitive pressure, in 1998 YFS has been created with the aim to provide better financial services and products to its customers. Due to change in the status of the organization, the HR functions of the YFS have been changed considerably. Earlier the YBS was a traditional organization having selected products and regulated environment. Employees generally have long length of services and committed to organization. Organization has uniform job evaluation procedure for all levels of employees with aim to provide clear rewards and cost control. The group of six people headed by personnel dept. people, has done Job assessment. Initial investment cost was high. The same system of job evaluation is been maintained after change in the organizational structure also. This approach to job evaluation delivered a simple and controllable set of grades. But due to change in environment, competition and customers need organizational structure has to be changed accordingly. The present system seems to be inflexible and unsuited to the organizational needs. But due to change in the needs of the services of the people YBS later on YFS has to change accordingly. Analysis. Due to external as well as internal compulsions, organization has to change accordingly. In due course, organization YFS has to support the new business strategy to replace its old traditional hierarchy graded pay scales. YFS decided its pay structures flexible. The company first trying to define and categorized jobs accordingly with customer services in retail banking. An internal project team has been formulated and the team identified different nature of jobs, put them into separate categories, accordingly. After classifying jobs into different categories HR dept and live managers adjusted the existing job into classified categories and decided on the packages (cost to company) by analyzing the type of job offered to them. This process takes initially much more time and cost because almost all the activities have to be performed in the complete organization but later on time becomes half. IT has been proposed that the proposed system must evaluate generic categories for the job accordingly and time to time. The whole exercise has been done with complete details with keeping in mind the changing scenario of the market. The issue of pay, development, performance etc. has been properly addressed in the new system. The reward system has been directly attached to performance and driven by performance ratings. The whole process could be termed as job evaluation process. It is the process of analyzing and assessing the various jobs systematically to ascertain their relative worth in an organization jobs are evaluated on the basis of their content and are placed in order their importance. In this way a job hierarchy is establish in the organization, the purpose being fixation of satisfactory wage differential among various jobs. It should be noted that in a job evaluation process the jobs are ranked not the jobholders. Jobholders are rated through performance appraisal. Job evaluation process starts with defining objectives of evaluation and ends with establishing wage and salary differentials. The main objective of job evaluation is to establish satisfactory wages and salary differentials. A job evaluation programme involves answering several questions. The major one are: i) which jobs are to be evaluated ii) who should evaluate jobs iii) what training do the evaluators need iv) How much time is involved v) What should be the criteria for evaluation vi) What methods of evaluation are to be employed. Now analysing the case study reveals that Sr. Manager put the change in reward system as based on actual performance and could be termed as flexible, clear, straightforward, Transparent and importantly supports business strategy and style with lots of emphasis on contingency plan for pay structure. It has been proposed and implemented new reward system, which supports business strategy as well as organizational culture; structure and supports people management policies and practices. After change in the organization it enhances its customer services and diversified product range. This leads to varied and more complicated decision-making process made by people other than HR managers and line managers. This results in the downsizing of HR dept of YFS from 1:25 to 1:100 with richer qualifications and expertise. These developments result in changes in ethos and style of people resourcing in the organization. The main changes, which occurred in YFS, are its ethos, style and people resourcing system. Management of the YFS becomes flexible and its main focus of services becomes its customers. Management delayered the system and hierarchy, which has not been the main system to be, maintained rather mutual understanding and collaboration between line managers and upper level management is the basic features to be observed by the organization. Collaboration of functions and discipline is the main objectives. The other main feature of the change was the integration of its internal as well as external functions. Each subsystem integrated to each other and function like a well-oiled machine. Customer relations and management takes the prime objectives and the broader vision has been adopted. Any subpart has been looked at as part of broader picture. So over all an integrated view has been adopted in the organization. Finally the main important aspect of any systemic change must be evaluated on the basis of its incurred cost on the whole organization. Globalization, intense competition and cost cutting was forced each organizations to cut its cost of operation which results in less cost products to its customers. The new changed objective and procedures led to cost cutting exercise in the YFS also. YFS reduced its HR staff as earlier mentioned that in 70’s & 80’s 1:25 ratio of HR staff has been maintained but after changes it becomes 1:100. This change leads to more work pressure and HR dept. HR dept. devised such techniques, which takes lesser & lesser time in the processes such as job evaluation. Job evaluation has been done by broadly classifying jobs into broader categories and takes lesser time. Now the whole system becomes cost sensitive and specially people resourcing has been evaluated on the basis of its cost, which incurred on the organization. Now the traditional HR system & functions are the things of the past. Some part of major parts of HR system has been out sourced, which prevents recurring cost of the company. So cost cutting in every front is the main theme of the YFS. Now at this point we are concerned with Human Resource planning (HRP) which assist each organization to plan its workforce, its required skills, knowledge etc. It is an important part of any organization. In simple words, HRP is understood as the process of fore casting an organizations future demand for and supply of the right type of people in the right member. HRP is a sub system in total organizational planning. Organizational planning includes managerial activities that set the company’s objectives for the future and determine the appropriate means for achieving those objectives (Leap & Crino 1990). HRP “includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what if anything, must be done to ensure that personnel supply equals personnel demand at the appropriate point in the future” (Leap &Crino, 1990). HRP essentially involved forecasting personnel needs, assessing personnel supply and matching demand supply factors through personnel related programmes. The planning process in influenced by overall organizational objections and environment of business. Environment factors must be evaluated which affects HRP such as Economic factors, Technological changes, Demographic changes, political and legislative issues and social concerns. By evaluating and scanning the environmental changes, managers can anticipate their impact and make adjustment early. HR plan need to be based on organizational objectives. Once the organization objectives are specified, communicated and understood by all concern, the HR Dept. must specify its objectives with regard to HR utilization in the organization. In developing these objectives, specific policies need to be formulated (Anthony et al., 1993) to address following questions such as: 1) Are vacancies to be filled by promotions from within or hiring from outside ii) How do the training and development objectives interface with the HRP objectives iii) what constrained are encountered by HRP iv) How to enrich employees job v) How to down size the organization to make it more competitive vi) To what extent production and operations be automated and vii) How to ensure continuous availability of adaptive and flexible workforce. Now the next step in the process is HR demand forecast, which is the process of estimating the future quantity and quality of people required. The basis of forecast must be annual budget and long term corporate plan, translated into activity levels for each function and department. Now the number of hours to be looked by each skilled category to make the quota for each period would be computed (Armstrong, 1988). Once the hours is available determining the quality and quantity of personnel will be the logical step. Demand forecasting must consider several factors both external as well as internal. Among the external factors are competition (foreign & domestic), economic climate, laws and regulatory bodies, changes in technology and social factor. Internal factors include budget constraints, production levels, new products and services organizational structure and employee separations. There are several good reasons to conduct demand forecasting (Rothwell, 1988), such as quantify the jobs, determine staff mix, assess appropriate staffing levels, prevent shortage of people etc. Personnel demand analysis provides the manager with the means of estimating the number of kind of employees that will require. The next logical step for the management to determine whether it will be able to procure the required number of personnel and the sources for such procurement. Supply forecasting measures the no. of people likely to be available from within and outside an organization, after making allowance for absenteeism, internal movements and promotions wastage and changes in hours and other conditions of work (Armstrong, 1988). The supply analysis covers i) Existing people resources ii) internal sources of supply and iii) External sources of supply. Present employee analysis greatly facilitated by HR Audits. It summarizes each employee’s skills and abilities. These skill inventories catalogues each employees skills and abilities (Werther & Davis, 1993). This summary gives planners a comprehensive understanding of the capabilities found in organization workforce. A properly designed and updated skill inventory system permits management to readily identify employees with particular skills in order to satisfy the changing needs of the company (Mondy & Noe, 1981). Once an organizations personnel demand and supply are forecasted, the two must reconciled or balanced in order that right employees can fill vacancies at the right time. HR programming is the third step in HR process. Implementation requires converting one HR Plan into action through recruitment selection and placement. Training and development, retraining and redeployment, retention plan, downsizing plan and managerial succession planning are the major steps to implement successful HRP. Control and evaluation is the fifth and final phase of HRP process. It includes budgets, targets and standards. So successful HRP must have following steps, such as recognized as integral part of corporate planning, backing by top management, coordinate and consultation between different management levels, personnel record must be complete, Time factors, techniques of planning best suited to available resources prepared by skilled people and scope for constant revisions and changes accordingly. So in the light of above mentioned practices of HRP, YFS must start with including HRP as the subsystem of corporate planning and objectives. Top management of YFS must accept HRP as the need of the hour and properly assigned the job to the equally skilled management team to perform HRP in the organization. Once the team has been selected and properly trained then it can start with various options to implement HRP in YFS. The team first evaluates the demand forecasting not only on quantity basis but also on the quality. i.e. skills and knowledge as well as attitude of the employees required by the YFS. Once the demand of people resource for the organization has been analysed then again team has to look after the supply position of the required number of personnel having requisite skills. When people has been recruited, their training and development, deployment, compensation plans, performance appraisal, Succession planning has to be carried out so that employees of YFS must be placed properly and right type of employees having right skills and qualifications could be placed at the right position. Conclusion: By going through the job evaluation and HRP in YFS we come to the conclusion that the YFS has not adopted completely the right practices of people resourcing right now. By just downsizing the HR and integrating it with the organization do not solve the problem. The organization is going through various changes due to internal as well as external influences. External environment changes forced the organization to change its structure and HR planning on the whole. Though the YFS has changed its polices and practices such as delayering, devolution of empowerment as well as hierarchy in the system and becomes customer oriented, integrated the subsystem to work as a complete unit and tried to reduce costing. But still enough has to be done by YFS. The first step will be the job evaluation, which is to be done by skilled people having requisite training to perform the job. After evaluation demand and supply forecasting has to be performed and right type of employees must be recruited to match the jobs requirement. Again time-to-time modifications must be done to tune the whole system according to changes occurred. Reference: 1. Leap, T.L. & Crino, M.D. (1990), Personnel/Human resource management Macmillan, New York. 2. Werther, W.B. & Davis, K. (1993), Human resources and personnel Management, McGraw- Hill, New York. 3. Anthony, W.P. et al. (1993), Strategic Human Resources Management, Dryden press, New York. 4. Armstrong, M. (1988), A handbook of personnel Management, Practice. 5. Rothwell, W.J. (1988), Strategic Human Resource planning and management, Prentice Hall, New Jersey. 6. Mondy, R.W. & Noe, R.M. (1981), Personnel the management Human resources, Allyn and Bacon. Read More